please unzip the package you got from themeforest.net ONE time. You should get a folder which contains PSDs, Docs and another zip file (which is called shoutbox.zip. This zip file is the right file. Go to your wordpress admin panel and navigate to Appearance > Themes. Then select the shoutbox.zip file, upload & install it. You can also unpack this zip file and upload the resulting folder via ftp to wp-content/themes.

I have done all what you described. It’s after uploading and installing I am given the error. I have tried both methods of uploading to the themes folder and also using the WordPress CP – both produce the same result and essentially render the site unusable once the files are uploaded.

I should add I am able to upload/install other themes as normal with no issues.